Extreme Networks swings to loss in weak Q1

Network infrastructure company Extreme Networks has reported a net loss of $5.48m for the first quarter 2010, compared to a net income of $1.63m in the same quarter last year. Revenue declined 26% to $66.3m.

During the quarter, operating loss was $5.17m compared to an operating income of $0.53m in the same period last year, while diluted net loss per share was $0.06 compared to diluted EPS of $0.01 a year ago.

The company said product revenue declined 32% to $50.75m, while service revenue increased 2% to $15.55m. Geographically, North America revenue declined 25% to $26.9m, EMEA revenue declined 32% to $28.1m, and APAC revenue declined 7% to $11.4m.

During the quarter, Extreme Networks acquired the software assets of Soapstone Networks that provides provisioning and service assurance for carrier Ethernet networks. It also partnered with security software provider McAfee to provide secure networking for organizations.

Bob L. Corey, CFO, acting president and CEO at Extreme Networks, said: "Last week we completed a reorganization to streamline operations, simplify the organization and reduce recurring costs. The effect of this action was to lower our quarterly breakeven to less than $70m in revenue and reduce quarterly operating expenses by approximately $2.5m. Our supply chain was constrained during Q1 impacting our ability to deliver product. We are disappointed with our performance in Q1 and are actively improving availability from our supply chain to meet customer demand for our products in Q2."

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